Biden to tout plan offering free internet to millions of homes

Bloomberg

Twenty US internet providers have agreed to offer high-speed connections at essentially no cost to millions of low-income households, as part of a program funded by the infrastructure law passed last year.
President Joe Biden and Vice President Kamala Harris will announce that 20 companies, including AT&T Inc., Comcast Corp. and Verizon Communications Inc., have agreed to offer high-speed plans that are
essentially free to eligible recipients, US administration officials said, speaking on condition of anonymity ahead of the announcement.
About 11.5 million households are already enrolled in the Affordable Connectivity Program, out of the 48 million that are eligible. Under the program, recipients get discounts of up to $30 a month.
The 20 companies have agreed to provide plans for that figure — meaning households incur no cost after the rebate — at a speed of at least 100 megabits per second. Some are dropping the prices of existing plans, while others are raising the speed, the officials said.
The companies weren’t offered anything, and won’t receive additional government funding, to offer the plans, the officials said.
The US government said it will launch a website, GetInternet.Gov, to allow people to find a qualifying plan, among other measures to increase the number of households that are
participating. The 20 eligible providers cover about 80% of the US population, the officials said.
Households qualify for the program by meeting an income threshold, or automatically if a member of the household participates in other federal programs, like Medicaid or Pell Grants. The 20 companies that signed up are a fraction of the more than 1,300 that are participating in the Affordable Connectivity Program.
Meanwhile, mortgage rates in the US resumed their upward climb, reaching the highest level since August 2009.
The average for a 30-year loan jumped to 5.27% from 5.10% last week, Freddie Mac said in a statement.
The Federal Reserve raised its benchmark rate by a half point, the biggest bump since 2000, and signalled further hikes to come in its effort to cool inflation and the overheated housing market. Higher mortgage costs — already up more than 2 percentage points this year — may increasingly push out would-be homebuyers and ease competition for a scarce supply of listings.
“While housing affordability and inflationary pressures pose challenges for potential buyers, house-price growth will continue but is expected to decelerate in the coming months,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
Families typically spent 18.7% of their income on mortgage payments in the first quarter, up from 14.2% a year earlier, data from National Association of Realtors showed this week.
At the current 30-year average, a borrower with a $300,000 mortgage would pay $1,660 a month, $377 more than at the end of last year.
“With much higher monthly payments, buyers who don’t have savings for a large down payment risk being priced out of the market,” said Joel Berner, senior economic research analyst from Realtor.com. “Unfortunately, this is occurring just as nationwide rents reach an all-time high, making saving more difficult for those looking to buy their first home.”
Tight inventory is beginning to crimp purchases. But plenty of pent-up demand from the past couple of years and a rising share of cash buyers make a crash in home sales unlikely, according to Matthew Pointon, senior property economist at Capital Economics.